Sarepta soars after FDA says some patients can get Elevidys
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The FDA decision was a relief to Sarepta investors who were worried about the company's future since it owes money to a biotech partner and faces $1.2 billion of debt due in 2027.
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Sarepta must make a $100 million milestone payment to Arrowhead Pharmaceuticals Inc. within the next two months as part of a deal between the two companies. After the FDA asked Sarepta to halt sales of Elevidys this month, its debt began trading at a level that indicated investors questioned the company's ability to repay it.
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The FDA's move 'significantly improves Elevidys' sales outlook in the near-term,' Jefferies analyst Andrew Tsai said in a note.
RBC Capital Markets analyst Brian Abrahams said the move 'takes the edge off solvency concerns to some extent' for the company, but won't eliminate its challenges. The drug 'will likely be used less than previously estimated,' he wrote, adding it was likely to achieve no more than $300 million in peak sales for walking patients.
Two teenage boys died of acute liver failure in recent months after taking Elevidys, which is used to treat Duchenne muscular dystrophy. They weren't able to walk because of the muscle-wasting disease. The company also has said that a 51-year-old patient died of acute liver failure last month in an early-stage trial of a gene therapy that works in a similar way to Elevidys.
After the first two deaths, Sarepta stopped shipping the drug for nonwalking, older patients. The drug remains paused for these people, though the FDA said it would also work with Sarepta regarding those patients.
In a statement, Sarepta said it will resume shipping of Elevidys 'imminently.'
'We remain committed to working closely with the FDA to ensure that all decisions are grounded in science and the best interests of patients, considering the compelling need of these families to access disease-modifying therapy,' the company said.
The FDA also said it had concluded that the death of an 8-year-old in Brazil was not related to the therapy. It had said it was investigating the death late Friday.
The FDA's decision to make Elevidys available again was praised by patient advocates. In a statement, Debra Miller, founder of CureDuchenne, said many families facing the muscle disorder 'have expressed that they understand the risks of gene therapy, and they deserve the opportunity to make their own informed decisions.'
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